CPIM APICS Certified in Production and Inventory Management 2 — Questions and Answers
Question 1: Which inventory cost category includes the expense of physically counting stock on hand?
- Carrying cost
- Ordering cost (Correct answer)
- Stockout cost
- Shrinkage cost
Correct answer: Ordering cost
Physical counting labor is part of ordering (acquisition) costs because it supports replenishment decisions.
Question 2: In a pull production system, what triggers the release of a work order to a upstream workstation?
- A master production schedule release
- A downstream signal indicating consumption (Correct answer)
- A purchase order from a supplier
- A forecasted demand spike
Correct answer: A downstream signal indicating consumption
Pull systems use downstream consumption signals (e.g., kanban cards) to authorize upstream production.
Question 3: What does the term 'throughput' measure in the Theory of Constraints (TOC)?
- Total inventory value on hand
- Rate at which the system generates money through sales (Correct answer)
- Number of units produced per shift
- Operating expense divided by revenue
Correct answer: Rate at which the system generates money through sales
In TOC, throughput is the rate at which the system generates revenue minus totally variable costs.
Question 4: Which document authorizes a supplier to deliver materials within a specified time window under a long-term agreement?
- Blanket purchase order
- Release order (Correct answer)
- Request for quotation
- Bill of lading
Correct answer: Release order
A release order (or delivery schedule) calls off specific quantities against an existing blanket purchase order.
Question 5: Safety stock is primarily calculated to protect against which two sources of variability?
- Price fluctuation and lead time changes
- Demand variability and lead time variability (Correct answer)
- Yield loss and scrap rates
- Forecast bias and order quantities
Correct answer: Demand variability and lead time variability
Safety stock buffers against uncertainty in both customer demand and supplier/production lead times.
Question 6: In a Lean environment, what is the purpose of a Heijunka box?
- To store kanban cards for overflow inventory
- To level production volume and mix over time (Correct answer)
- To track supplier delivery performance
- To visualize work-in-process limits
Correct answer: To level production volume and mix over time
A Heijunka box is a visual scheduling tool that smooths production by sequencing work orders across time slots.
Question 7: Which planning horizon does the Sales and Operations Planning (S&OP) process typically cover?
- Days to two weeks
- Two to four weeks
- Two to eighteen months (Correct answer)
- Three to ten years
Correct answer: Two to eighteen months
S&OP typically covers a rolling horizon of 2–18 months, balancing supply capacity with aggregate demand.
CPIM APICS Certified in Production and Inventory Management 2
Which inventory cost category includes the expense of physically counting stock on hand?